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OPINION

The Tax-Exemption Rip-Off

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
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If you believe future IRS abuses will be prevented by putting Lois Learner and her merry band of political hacks in the hoosegow, stop drinking Potomac River Kool-Aid and start partaking in a dose of reality.

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The most effective way to eliminate political hackery at the IRS would be to abolish the so-called progressive income tax and completely dismantle the tax agency. Too draconian? Only if you believe the Tea Party purge is the solitary scandal rolling around the halls at the IRS. It’s not.

Fact is the system is corrupt to the core. To illustrate, consider Lois Learner’s old haunt at the Tax Exempt and Government Entities Division. When the IRS bureaucrats determine that an organization is a 501(c)(3) tax-exempt group, that group is excused from paying federal taxes and contributors to the group are allowed to deduct contributions from their taxable income. Those Americans who actually pay federal taxes must make up what the U.S. Treasury loses as a result of the tax exemptions. Moreover, once the IRS determines that a group is tax-exempt, that group is excused from paying taxes (including property taxes) in at least thirty-nine states.

Consider these facts from the National Center For Charitable Statistics about 501 (c)(3) Public Charities. In 1988, 10,215 organizations filed with the IRS as 501(c)(3) Public Charities. They reported combined revenues of $29.8-billion. By July, 2013, organizations filing as 501(c)(3) Public Charities amounted to 357,167! These tax-exempt groups reported combined revenues of $1.6-trillion and assets of $2.9-trillion.

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Calculating the amount of federal and state tax revenue lost as a result of tax exemptions is way above my pay grade. I would guess the federal and state revenue loss exceeds one-trillion dollars annually. Who gets stuck paying for this loss? The American taxpayer. Talk about redistribution of wealth. Need I remind you that in 2011 only 53% of American households actually paid federal income taxes?

Allow me to add insult to injury. The uncivil servants at the IRS and their progressive allies on Capitol Hill have corrupted the definition of “public charities” to allow activist groups to feed at the trough of the American taxpayer. For example, 13,716 environmental groups filed as tax-exempt 501(c)(3)s in 2010. Their combined revenue was $7.4-billion. Their total assets equaled $20.6-billion.

In 2012, the Environmental Defense Fund (EDF) reported $112-million in revenue and $173.1-million in assets. EDF has been tax-exempt since 1969. In 2011, the Natural Resources Defense Council, Inc. (NRDC) reported $97-million in revenue and $248.9-million in assets. NRDC has been tax-exempt since 1970. Three tax-exempt Greenpeace organizations in the U.S. reported $39.2-million in revenue and $20.6-million in assets in 2011.

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I wonder whether the tax-paying coal miners of West Virginia realize that they are subsidizing progressives intent on destroying their jobs? Do they consider Greenpeace charitable? I can’t speak for the coal miners, but I can confirm that both New Zealand and Canada have stripped Greenpeace of its charity status.

What about unemployed union workers who have been denied jobs on the Keystone pipeline? Is it fair and just that they have to pay taxes while the progressive activist groups lobbying against pipeline construction avoid state and federal tax collectors?

Progressive environmental organizations aren’t the only radicals feeding off the beleaguered taxpayer. People for the Ethical Treatment of Animals (PETA) has been tax-exempt since 1981. Last year PETA reported $31-million in revenue and $16-million in assets. For those who have been victimized by the radical animal rights group, how does it feel to be forced to subsidize your adversary?

The Ruckus Society trains protesters to disrupt public events and engage in civil disobedience. Yes, Ruckus has been tax-exempt since 1996. Three years later it helped train radicals to rain havoc on Seattle during a World Trade Organization conference. Very charitable, wouldn’t you agree?

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One final example: The Council on American Islamic Relations (CAIR) which is alleged to have links to Hamas, a State Department designated terrorist group, has at least thirteen 501(c)(3) tax-exempt groups in the U.S. During 2011, CAIR reported $8.7-million in revenues and $6.4-million in assets. It also boasts a multi-million dollar lobbying organization. Isn’t it ironic that the IRS saw fit to declare CAIR a Public Charity worthy of tax-exempt status, while putting the Tea Party through the wringer?

Once the Congress finishes its investigation of the IRS Tea Party scandal it would do well to take a comprehensive look at how “charity” is defined for the purpose of granting tax exemptions. Failure to do so will amount to taxation without representation for millions of real American taxpayers.

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